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Sprout Social Fortune 500 Market Share Doubled the Last Two Years - Piper Sandler

Stock Markets Sep 23, 2022 20:50
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By Sam Boughedda

In a note to clients Friday, a Piper Sandler analyst was positive on shares of Sprout Social (NASDAQ:SPT), reiterating an Overweight rating and $70 per share price target.

The analyst said that after analyzing Twitter (NYSE:TWTR) metadata, they put together a proprietary analysis of Sprout Social's momentum within the Fortune 500.

"Our analysis yielded the following insights: 1) we estimate Fortune 500 market share for SPT has doubled in the last two years to >17%, 2) high-end traction remains strong in 2022 with several key wins: Qualcomm (NASDAQ:QCOM), General Dynamics (NYSE:GD), Carvana (NYSE:CVNA), Danaher Corp (NYSE:DHR), XPO Logistics (NYSE:XPO), conversion of Salesforce (NYSE:CRM) over to Sprout Social this month, and 3) opportunity for continued market share gains seems favorable with >1/3rd of the Fortune 500 using non-competitive solutions (outside the top four tools)," explained the analyst.

While the firm's primary concern "with the setup on SPT is lapping four consecutive quarters of >40% y/y revenue growth with net new ARR growing only a modest ~3% YTD," they are optimistic the next two quarters will demonstrate improving net new ARR trends, adding that with "increasing enterprise focus, comes increasing 2H seasonality."

Sprout Social Fortune 500 Market Share Doubled the Last Two Years - Piper Sandler
 

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